Hy-Vee CEO’s political message to employees cites tax concerns, ‘social unrest’

October 24, 2020 9:00 am

Protesters dance on top of a police car outside the Park Avenue Hy-Vee in Des Moines on June 20, 2020. (Photo by Linh Ta/Iowa Capital Dispatch)

Randy Edeker, CEO of Hy-Vee, is concerned about the election, specifically how it will affect taxes.

In a video to employees, which aired in employee break rooms across the grocery-store giant’s eight-state region, Edeker stated:

Randy Edeker is chairman, CEO and president of Hy-Vee. (Photo courtesy of Hy-Vee)

“I never endorse and I try not to ever push a certain candidate or a direction. I always try to speak about Hy-Vee. I have some of the concerns about some of the policies that are being discussed by some of the candidates. Some of the tax policies would be very impactful to Hy-Vee. And the changes in taxes were part of the way we were able to bring a lot of  good things to the employees this past year. Social unrest unfortunately continues to be a problem around the community and we continue to invest in our local groups who we really think can bring unity to our towns.”

Edeker’s message is clear: Donald Trump and the chaos of his presidency have been good for business. 

 In the Midwest, where Hy-Vee operates, the pandemic is surging. Hospitals are struggling to meet the demand and in Hy-Vee’s eight-state region — Iowa, Illinois, Missouri, Kansas, Nebraska, South Dakota, Minnesota and Wisconsin — nearly 20,000 people have died from COVID-19.

The institutional and governmental mishandling of the pandemic, plus American fears, plus layoffs have added up to some big profits for Hy-Vee.

In an email, Hy-Vee spokesperson Tina Potthoff stated, “Due to COVID-19, many supermarkets have set records this year with so many consumers opting to eat at home versus eat out. Hy-Vee had more than $11 billion in sales in FY 2020 compared to slightly more than $10.6 billion in sales in FY 2019.”

And Hy-Vee has been quick to maximize the potential of the pandemic. Twenty-four-hour stores cut back their hours. In Iowa, can and bottle redemption centers were closed, meaning less staff to manage them. And Hy-Vee launched Mealtime to Go – where customers could pick up ready-to-eat meals at Hy-Vee stores.

Hy-Vee’s Aisles Online business quadrupled due to fears of the deadly virus, Potthoff said.

And in mid-March, just as the pandemic was hitting the Midwest, Hy-Vee laid off several hundred employees in a massive corporate restructuring.

And Hy-Vee is putting big money behind the election. According to FEC filings, Edeker and several other members of Hy-Vee’s corporate leadership are regular monthly donors and the primary sponsors of the Hy-Vee Inc Employees Political Action Committee. The PAC has given money primarily to Republicans this year, including $30,000 to the Republican Party of Iowa, $500 to the South Dakota Republican Party, $2,000 to the Kansas House Republicans, $2,500 to the Kansas State Republicans, and $1,250 to the Senate Republican Campaign Committee. 

The PAC has given $10,000 to the Iowa Democratic Party and supports a handful of Democratic state senators and legislators. But the list still leans Republican. Politicians who received the most money from the PAC include Nebraska Gov. Pete Ricketts, $5,000; Iowa House Speaker Pat Grassley, $3,000, and Iowa Senate Majority Leader Jack Whitver, $3,500.

The PAC also funds the Hy-Vee Employee’s Federal Commission Missouri, a state-level PAC that donates money to both Democrat and Republican legislators.

Edeker’s message to employees and donations to the PACs are legal. Iowa attorney Gary Dickey, who has served as legal counsel to several political campaigns, explained, “The CEO has a First Amendment right to express his opinion on tax policy to his employees — even if he is acting with the intent to influence the employees’ votes.  So long as he does not expressly advocate for the election or defeat of a candidate, it does not even trigger campaign finance laws.”

Iowa campaign law only prevents companies from using “magic words,” which are defined as “Words and symbols that exhort someone to vote for or against a clearly identified candidate or ballot issue such as ‘elect’, ‘vote for’, ‘defeat,’ or ‘vote against’.”   

And company executives are free to donate to PACs as they see fit. Donations directly from a corporation are prohibited.

But it’s about more than just taxes.

Edeker’s mention of “social unrest” is also loaded language. Rather than calling the protests “protests,” Edeker calls them “social unrest,” suggesting pandemonium and meaningless violence, rather than an organized effort to demand racial equality and end systemic racism. His wording also is a nod to the minority of incidents of protests over the summer that did escalate into clashes with the police. The majority were peaceful, but the language Edeker used with his employees doesn’t acknowledge that or the systemic racism that the protests were seeking to change.

Jassma’ray Johnson, 19, of Des Moines, posted on Facebook about how she felt mistreated at the Park Avenue Hy-Vee in Des Moines, sparking a protest outside the store Saturday afternoon.

In June, a Hy-Vee employee, Jassma’ray Johnson, 19, said her manager at the Park Avenue Hy-Vee in Des Moines questioned her about her appearance at recent Black Lives Matter protests. When Johnson complained about that treatment on social media, Black Lives Matter protesters showed up at the store, where a man attempted to drive through the crowd. 

In an email, Potthoff noted, “With regard to your question about social unrest, we are trying to bring communities together, not rip them apart.” She also noted that Hy-Vee has made a $1 million commitment to organizations that support “racial unity and equality.” 

Some of the organizations include, Starts Right Here in Des Moines, Urban Dreams in Des Moines, the NAACP, the Alan Page Education Foundation in Minneapolis and Negro Leagues Baseball Museum in Kansas City.

However, Dickey points out that despite the legality of Edeker’s message, “It’s still newsworthy that companies, like Hy-Vee, are inserting themselves into elections by communicating to employees.  I think it could have a chilling effect.  I don’t know how many employees feel comfortable publicly supporting candidates directly contrary to views expressed by the company’s CEOs.”

And it has had a chilling effect. This spring, a Hy-Vee employee who posted on her Facebook page about customers needing to wear masks was reprimanded and declined to speak to me about the story for fear of losing her job. 

It’s a pandemic. People are afraid. The employee who sent me the video declined to be named because of fear of losing their job.

When asked to clarify Edeker’s statements, the Hy-Vee spokeswoman questioned whether it was newsworthy. In a later email, Potthoff stated, “It’s imperative that a business of our size constantly be talking about economic outcomes on a local, state and national level on a continual basis. That’s just good business. As one of the few 90-year-old companies in the Midwest, we must constantly be looking at outcomes that may impact our business model and opportunities for employment. The year doesn’t matter, but the policy does — and certain policies can have detrimental effects on the retail sector if not closely monitored and reviewed.”

Millions of Americans are losing their jobs. Hundreds of thousands are dying. And all that adds up to are huge profits for the very few. 

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Lyz Lenz
Lyz Lenz

Lyz Lenz is the author of "Belabored: A Vindication of the Rights of Pregnant Women" and "God Land: A Story of Faith, Loss and Renewal in Middle America." She's a columnist and writer and her work has appeared in the Columbia Journalism Review, New York Times, Washington Post, and others. She lives in Iowa with her son and daughter and cat and dog.